Is Nelnet Paying $1 Million Just to Save Jon Bruning's Senate Bid?

Going along with the new poll you see on the front page, one has to wonder how Nelnet officials really feel about Attorney General Jon Bruning's million dollar flip-flop. Dave briefly covered Bruning's decision to reinstate the fine on Nelnet this weekend. It was certainly the right decision, but it has to be frustrating as hell for Nelnet knowing they're paying $1 million to the state of Nebraska just so that Bruning doesn't look bad (or worse) in the press. Just two days earlier they had to have been feeling pretty good thinking they were getting away from their $1 million deal having paid no more than $16,100 in individual contributions to Bruning's Senate campaign. Now, because of those contributions and the resulting appearance of corruption, they're paying another million dollars in de facto donations - literally bailing out Bruning from the mess he'd created. Of course, that's a small portion of the $278 million Nelnet swindled from American taxpayers with no attempt at recovery by the Bush Administration so long as they promised not to do it again. So, the state of Nebraska is probably just seeing back the share it should have been owed (citizens in 49 other states won't be so lucky). But, honestly, if we thought Bruning was in Nelnet's pocket when he forgave them their debt - probably as part of an agreement underneath the table if New York AG Andrew Cuomo didn't sign off on their million dollar deal - then, just how much deeper can he get then after actually making them pay? This is corporate America we're talking about. An "E" for effort doesn't count for much. Nelnet is paying a million dollars to save Jon Bruning any more bad press. It's not a direct contribution to Bruning's Senate campaign, but don't think he isn't grateful. And, don't think for a second Nelnet is just writing this million dollars off. This is going under "Accounts Receivable" in their very long political ledger, and I'm sure a Senator Bruning (God help us) would see them very well-rewarded for their investment.

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Jon Bruning: "Friend of Nelnet", Enemy of Taxpayers

I'm not sure, but it sounds like Nebraska Attorney General Jon Bruning just sold out taxpayers on 1 million dollars in exchange for $16,100 in contributions to his fledgling campaign for Chuck Hagel's Senate seat. Judge for yourself:

The Lincoln Journal-Star (04/21/2007):

Lincoln student loan company Nelnet has agreed to pay $1 million and adopt a code of conduct on student lending as part of an agreement with Nebraska Attorney General Jon Bruning. Bruning said Friday the agreement came about after Nelnet approached his office in February and "self disclosed" two incidents he called "very minor."

Now, read yesterday's Omaha World Herald, hidden deep within an article in which Bruning praises Nelnet for their ethics and honesty:

Attorney General Jon Bruning labeled himself "a friend of Nelnet" while blasting a New York investigation into the Lincoln student loan company's business practices. Bruning, a Republican candidate for the U.S. Senate, said Tuesday he supports Nelnet because it is a good Nebraska company - not a criminal enterprise, as New York Attorney General Andrew Cuomo and supporters of direct-government student loans have portrayed the firm. Nelnet recently paid $2 million and signed a code of conduct to settle Cuomo's investigation.... On the day of that settlement, Bruning relieved the company of its obligation to pay a $1 million settlement in Nebraska, which he had imposed after a brief investigation in April. Bruning explained the about-face on the settlement Wednesday by saying he never really wanted to fine Nelnet in the first place.... [Bruning] repeatedly criticized Cuomo's investigation of student loan companies, labeling it "ridiculous," "scary" and "political." "It's widely perceived as an embarrassment," Bruning said of the Cuomo investigation.

If Cuomo's investigation was such an "embarrassment", why did Nelnet just pay out $2 million to have it settled? More importantly, why would a settlement with the state of New York have any effect whatsoever on the earlier $1 million settlement with the state of Nebraska - which purposefully prevented any true investigaton of Nelnet's business practices in its home state?

That original $1 million settlement was already deeply suspicious. Now, Bruning's forgiveness of the debt owed under that agreement takes those suspicions to a whole new level.  What's going on here? Surprise, surprise....as first reported by Higher Ed Watch, then buried in the Omaha World-Herald:

Bruning has received $16,100 for his U.S. Senate campaign from executives at Nelnet and Union Bank & Trust Co., including $9,200 from Nelnet Chief Executive Officer Mike Dunlap, whose family owns Union Bank.

So, we can see why Bruning might be friendly enough to Nelnet that he would forgive their $1 million debt to the state of Nebraska (a pretty good return on 16K, if you ask me). But, why in the hell would Bruning have fined Nelnet in the first place if he had no intention of collecting? Higher Ed Watch puts the pieces together:

Nelnet took a gamble with a friendly state attorney general in an attempt to avoid harsh penalties for actions being scrutinized by New York State and others. When that gambit failed to sate Cuomo and Nelnet was forced to settle with New York State, the company was allowed to get out of its original deal with its favorite state attorney general.

Meanwhile, to Bruning's attacks on Cuomo's investigation and his proclaiming "I will never apologize for being a defender of Nelnet", Higher Ed Watch responds:

Wait a minute. Isn't the Nebraska Attorney General supposed to be the chief prosecutor for the state? It's Attorney General Bruning's job to defend the State of Nebraska, not Nelnet, and to prosecute wrongdoing in the state. And Bruning must have believed that Nelnet engaged in wrongdoing with respect to the company's student loan marketing practices, because his office fined the company $1 million for those practices. If Bruning considers himself "a defender of Nelnet" and the Nebraska Attorney General office's investigation of Nelnet went to court, was Bruning planning on representing both sides at trial?

Bruning also declared Nelnet "an ethical, decent, honest company," a statement that should draw the ire of every American taxpayer after Nelnet was recently let off the hook for manipulating student loan programs to cheat the government out of $278 million.

If that's Bruning's idea of ethics, he just made one hell of an argument for anyone-but-Bruning in 2008. And, we also have to ask ourselves what the hell we were thinking electing this guy as Attorney General, our chief law enforcement official in the state.

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